Smart, comprehensive travel budget planning can help your teams (and your organization as a whole) get the most out of every trip. 

For many SMEs, business travel and its associated costs may not be a front-of-mind concern. However, smart travel budget planning is key to ensuring that every trip is a worthwhile expense amid your broader spending. It’s also vital to making smart spending decisions in the future. 

However, where do you start? Whether you’re an Executive or an in-house Travel Manager, if this is an area of your company’s finances that has fallen through the cracks. Here are the three steps you should take to begin travel budget planning.

Key Takeaways  

• Gather data on past travel.
• Glean insights into how much your teams already travel and how much they’re spending when they do.
• Understand how external factors, like seasonality, may be impacting your travel spending.
• Analyze industry predictions and averages to understand the broader cost of business travel overall.
• Reflect on your goals for the year ahead and how they may increase or decrease travel costs.
• Set your travel budget and create a travel policy accordingly.

Travel Budget Planning Step 1: Analyze Past Spending and Patterns

Before you can begin planning for the future, it’s a wise idea to get a handle on your past. It’s a reliable predictor of what lies ahead.

Look at your past travel spending and try to identify any patterns. This is a task wherein AI tools may come in handy, helping you parse large quantities of data to pinpoint what’s most helpful. In addition to simply airfare or car rental fees, look at all costs associated with travel. Include conference attendance costs, travel insurance fees, reimbursements or per diem, and more.

Travel Budget Planning Step 2: Understand the Real Costs of a Trip

Using this information, you can start to get a feel for your average cost per trip. You can also begin to understand when, why and how your teams are most likely to travel. You’ll be able to see which teams or team members travel the most. All of this is very valuable data when it comes to planning for the future. 

However, you’ll need more data than just this. There’s more at play than just the individual travel decisions that your internal teams make. External factors also heavily impact your fluctuating travel costs. If you’re travel budget planning for 2026, you’ll want to look at what’s predicted for next year’s travel costs, based on global economic trends, as well as what business Travelers as a whole are spending, on average.

According to the Global Business Travel Association’s Global Business Travel Forecast, business travel costs are predicted to continue to increase in 2026. Average global air ticket prices may increase by 0.4% (to $708 USD). Global hotel daily rates may increase by 1.8% (to $166 USD). Average global rental car daily rates may increase by 2.8% (to $48 USD). Average meetings and events per-attendee costs per day may increase by 2.4% (to $172 USD).

While these GBTA predictions apply internationally, certain regions may see slight differences. For example, in 2024, average airfare in Europe and MENA rose nearly 5% compared to the nearly 7% in North America and the mere 1.7% in Latin America. Then, also in 2024, hotel pricing grew by 7% in Latin America, compared to just 1.3% in Europe and MENA. 

Meanwhile, Business Travel News offers a corporate travel index, both U.S. and non-U.S. variants. It provides estimates for average business travel hotel costs, car rental costs, and meal costs in a wide range of cities worldwide. This data makes a useful tool for setting per diems, as it pulls together expenses into total daily totals.

On an even more basic level, though, it’s worth thinking about very simple, easy-to-overlook external factors that may impact your average travel costs, such as seasonality. If you’re Travelers are traveling to in-demand destinations at the height of tourist season, for example, your travel costs are going to be higher than what they might be otherwise. Additionally, there’s how far out your Travelers are booking their trips. You can generally expect to spend less for travel planned well in advance than you might for travel booked last-minute. 

Travel Budget Planning Step 3: Set Your Travel Budget and Policies

Once you’re aware of both your current travel spend and what you’re likely to spend on travel in the future based on both industry predictions and external factors. You’ll want to think about one last thing before setting your travel budgets for 2026. What are your team’s goals and how does travel play into those goals? 

Consider whether you’re planning an expansion in 2026, or if you’re going to double-down on your international sales and client relations, as some possibilities. These efforts may necessitate more travel next year than your team enjoyed last year, resulting in greater travel expenses. On the other hand, what if your goals are to cut costs or to increase sustainability? In that case, you might aim to reduce overall travel, cutting your travel spend.

Once you’ve thought about all of the above, you can combine that knowledge and set your travel budgets and policy for 2026, based on spend categories and needs.

A comprehensive travel policy should contain more than merely how much Travelers are permitted to spend on a trip, and on certain elements of a trip. You’ll also want to think about other aspects of the Business Travel Experience that impact your budget.

For instance, do you want Travelers to use certain travel suppliers, with whom you have relationships that enable discounts or other perks, thereby saving you money? Will you set new guidelines around expensing? A fully robust policy will incorporate factors such as booking procedures, preferred suppliers and expensing requirements.

Travel Budget Planning: A Worthwhile Investment

Travel budget planning requires careful consideration and an investment of time upfront, but it’s necessary if you want to properly manage business travel spending in such a way that you get the utmost value from each trip. Need more help? Check out our downloadable checklist that streamlines the process for utmost efficiency. 

Now that you know how to get started with travel budget planning, stay tuned for our follow-up article in December. It will cover optimizing your business travel budget through key steps such as implementing visibility tools and controls, and continual budget review and refinement.